Commercial Litigation Funding
Third Party Funding Explained

Third Party Funding Explained

Third Party Funding is an arrangement between a specialist funding company and a client (typically the claimant) involved in litigation or arbitration, whereby the funder will agree to finance some or all of the client’s legal fees in exchange for a share of the ‘case proceeds’ (usually the recovered damages).

A significant advantage of this type of funding is that it is non-recourse, meaning the funder only recovers the amount it has spent on the case, together with its success fee, if the case is successful and a sufficient recovery is achieved.

The costs involved in pursuing any form of commercial litigation or arbitration can be considerable. Lack of certainty regarding the costs budget is one of the key concerns for anyone embarking on litigation.  By working with a litigation funder, a client can remove this uncertainty and ensure the cashflow required for the case is available.

For a claimant embroiled in a ‘David v Goliath’ battle, where it is pursuing a financially stronger opponent, litigation funding can help level the playing field by removing the opponent’s ability to outspend the claimant in a bid to stifle the claim. In some instances, having a litigation funder on board can even encourage the opponent to settle the case at an earlier stage.